Hans-Werner Sinn

Nationalökonomie & Finanzwissenschaft

Ifo Viewpoint

Ifo Viewpoint No. 56: Seven Truths About Civil Servants

Munich
11 October 2004

Is Germany sick because it affords itself armies of tenured civil servants who work little, have a grumpy attitude towards the people, and enjoy their sinecures? No, at a closer look the facts are quite different from this stereotype.

1. At a share of only 12.5% of total employment, Germany has extremely few civil servants. In Denmark and Sweden about one third of employees work for the state, in Great Britain the share is 22%, and even in the United States it is 16%. Among the developed OECD countries, Germany ranks low regarding the share of civil servants, comparable to Luxembourg and Japan. Yet the work of German public offices is exemplary and the efficiency of German civil servants can stand up to any international comparison.

2. Only about one third of state employees are fully tenured civil servants and judges. Two thirds are workers and salaried employees, subject to normal collective bargaining rules. Dismissal protection of many private sector employees is almost as high today as that of civil servants. Those employed for 15 years can hardly ever be fired. Then too, one does not become a civil servant over night, but only after very long waiting periods.

3. Civil servants are not allowed to strike and swear an oath of allegiance to the state. If need be, they may be transferred to another location at any time. They represent an always available, reliable base of the state, guaranteeing stability in the most difficult of times. Judges and policemen are civil servants, for example, because they must be independent and incorruptible. In the past, engine drivers, attendants at level crossings or flight controllers were civil servants because traffic was not to be interrupted by strikes. (Why teachers and professors must be civil servants, however, is more difficult to understand.)

4. Public employees work more. At an average 1708 hours per year, the collectively agreed working time of blue and white collar public sector employees is 3.5% higher than the average of private sector employees who work 1649 hours per year. Civil servants even work up to 12% longer hours than private sector employees.

5. In mid-2003, gross wages and salaries of public sector employees were on average 5.5% lower than in the private sector despite longer working hours and despite the fact that public employees must on average have higher qualifications than private sector employees.

6. That civil servants are advantaged because they do not have to pay social security contributions is a fairytale. Since the state has always had to compete with the private sector, civil servants’ net salaries, not gross salaries must be compared with those of private sector employees. The amounts paid by others for social security contributions are not granted as salaries to the civil servants from the beginning.

7. Civil servant salaries, at least at the professional levels, have risen much more slowly than private sector salaries. During the 30 years from 1970 to 2000, the rise of gross monthly earnings of highly qualified salaried employees in the private sector averaged 330%, whereas salaries of professionals in the civil service rose only by an average 190%. During the same time, hourly wages of industry workers rose by 350% and the rate of social assistance by 450%.

Conclusion: Civil servants are much cheaper and more industrious than their image. We ought to be happy to have them.

Hans-Werner Sinn
Professor of Economics and Public Finance
President of the Ifo Institute

Published under the title "Die Wahrheit über deutsche Beamte", Bild, 6th October 2004, p. 2.